Company Description

Crane Co. manufactures highly engineered industrial products. Founded in 1855, the company provides products and solutions to customers in the aerospace, electronics, hydrocarbon processing, petrochemical, chemical, power generation, automated merchandising, transportation and other markets. Crane's five business segments are: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling and Controls. Crane has approximately 11,000 employees in North America, South America, Europe, Asia and Australia.

Solid Income

The company recently declared a quarterly dividend of 20 cents per share, noting that it is payable on December 10 to shareholders of record as of the close of business on November 30.

Crane's dividend yield of 2.7% tops the industry average of 1.6%

A Strong Quarter

The company also posted solid results for the third quarter, raising the lower end of its earnings outlook.

Third-quarter earnings per share of 60 cents surpassed the Zacks Consensus Estimate by 25% and matched the year-prior earnings. Sales of $551 million slipped 14% year-over-year.

Management noted that despite a 14% decline in sales from the third quarter of 2008, operating profit and earnings per share were flat compared to 2008, primarily reflecting the company's success in re-aligning its cost base, adding that operating margin improved by 160 basis points, to 10.1%, compared to 8.5% a year ago.

The company said its $305 million in cash, $300 million revolving bank credit agreement and no near-term debt maturities provide it with a solid financial foundation to continue to manage through the current environment, positioning Crane for growth as end markets recover.

Bullish Estimates and a Surging Share Price

The company upped the lower end of its full-year earnings guidance to a range of $1.90 - $2.05 from $1.75 - $2.05.

Analysts boosted the 2009 Zacks Consensus Estimate to $2.05 per share from last month's $1.90. For the following year, analysts polled by Zacks are projecting earnings of $2.21 per share, versus the previous month's $2.08.

Shares of Crane soared past the market by more than 100% over the past year. Zacks Investment Research

Excluding certain non-recurring items, adjusted earnings per share came in at 11 cents, edging past the Zacks Consensus Estimate by a penny.

The company recorded a growth of 3.7% to $489.8 million, compared to $472.1 million in the year-ago quarter. The expansion was primarily driven by the US federal sector, increased transaction volumes and growth in maintenance renewals. It was partially offset by the sluggish corporate spending environment, which affected VMware's license revenues.

In terms of geographic regions, U.S. revenues slipped 1% year over year to $246 million, while international revenues grew 9% to $244 million driven by growth in Canada, South America and Asia-Pacific.

VMware spent $133.5 million during the quarter towards research and development, a growth of 56.5% from $85.3 million in the year-ago period. Sales and marketing expenses also increased 10.3% year over year to $185.2 million, primarily due to worldwide promotional efforts related to the new version of the company's virtualization software, vSphere 4. Moreover, additional royalties and commissions paid to partners coupled with a weak dollar also contributed to total operating expenses, which increased 25.7% year over year to $466.5 million. Accordingly, operating income declined 77% year over year to $23.2 million, while operating margin contracted by 16.7% to 4.7%.

During the quarter, the company wrapped up the acquisition of SpringSource, a company engaged in enterprise and web application development and management. VMware paid about $420 million for the acquisition, including $356 million in cash, and expects the deal to have a dilutive impact on operating margins during the fourth quarter.

The company ended the quarter with cash and cash equivalents of $2.2 billion, compared to $1.7 billion in the year-ago period. During the quarter, VMware generated $199.4 million of cash from operations and deployed $14.2 million towards capital expenditure apart from the cash utilized for the acquisition.

Moving forward, management expects fourth-quarter revenues between $540 million and $560 million, citing improved short-term visibility in its business. However, the company plans to move ahead conservatively, assuming a slow recovery in macroeconomic conditions.

Meanwhile, the Zacks Consensus Estimate, derived from 15 covering analysts, is currently pegged at 48 cents per share for the full-year, which has remained constant over the past 3 months. However, the most accurate estimate is slightly more bullish at 51 cents per share.

VMware is a provider of virtualization solutions from the desktop to the data center. The company’s virtualization solutions address a range of information technology problems that include cost and operational inefficiencies, business continuity, software lifecycle management and desktop management. VMware works closely with over 900 technology partners, including server, microprocessor, storage, networking and software vendors.

Company Description

GOL is a low-cost Brazilian airline. It operates 110 737 aircraft and connects all of Brazil's cities to South America. The company's frequent flier program, with 6 million members, is the largest in South America.

As of the end of the second quarter of 2009, GOL offered 800 daily flights to 49 destinations.

GOL Surprised by 382.35% in the Second Quarter

On Aug 11, GOL reported second quarter results of 82 cents per share which far surpassed the Zacks Consensus Estimate of 17 cents.

Net income climbed to R$353.7mm from a loss of R$166.55mm in the second quarter of 2008.

Revenues, however, fell 4.8% to R$1.394mm compared to R$1.464mm in the year ago period. Domestic flight demand in the Brazilian market, measured by revenue passenger kilometers (domestic RPK) grew by 1.8%. Over the first six months of the year, it jumped 3.1% but the company believes that real demand growth was flat due to the increase of low-fare seats supply and introductory fares.

During the quarter, GOL also entered into 2 new code share agreements with AirFrance-KLM in April and American Airlines in July. The agreements are part of GOL's strategy to allow its customers to travel to more international destinations using frequent flyer miles.

The company also launched Gollog Express, a new door-to-door delivery service in the express cargo market, which is a growing profit area.

Zacks Consensus Estimates Soar

Analysts are certainly bullish on 2009 for the company.

The third quarter Zacks Consensus Estimate jumped 10 cents to 27 cents in the last 60 days.

2 out of 4 covering analysts have raised 2009 estimates in the last 30 days as the full-year Zacks Consensus Estimate surged 122% to $1.02 from 46 cents per share in the last 2 months. Analysts now expect year over year earnings growth in 2009 of 140.04%.

Value Fundamentals

GOL is a Zacks #1 Rank (strong buy) stock. It has a price-to-book of 1.38. The company has a solid 5-year average return on equity (ROE) of 11.48%.

Additionally, investors get rewarded with a dividend currently yielding 1.10%.

Zacks Investment Research

Based in Colorado, Newmont is trying to boost reserves to benefit from historically high gold prices. In June, the company concluded its purchase of the remainder of the Boddington gold project, the largest in Australia, from AngloGold Ashanti Ltd. (AU). The $2.9 billion mine will have an annual capacity of about 1 million ounces at a projected cost of $300 an ounce.

Newmont’s gold sales fell 5.7% to 1.2 million ounces in the second quarter. After which the company lowered the higher end of its 2009 gold sales forecast range to 5.4 million ounces from 5.5 million ounces. The company sold 5.2 million ounces of gold in 2008.

Newmont also boosted the reserve estimate of its Minas Conga copper-gold project in Peru to 11.8 million ounces of gold and 3.2 billion pounds of copper from the previous forecast of more than 6 million ounces of gold and roughly 1.7 billion pounds of copper.

Minas Conga is a deposit with reserves of nearly 12 million ounces of gold and 3.2 billion pounds of copper. The project has an annual production potential of 480,000 to 780,000 ounces of gold and an expected mine life of 15 to 20 years. Copper production capacity is between 175 million and 225 million pounds and around 90,000 tons of fine copper per year.

Currently, the company is evaluating its decision to develop the Minas Conga mine, which was delayed by the high projected cost of development on the back of global economic and credit crunch last year.

Newmont controls the Yanacocha gold pit with a 51.35% stake while Buenaventura (BVN), the Peruvian precious metals miner holds 43.65%. The International Finance Corporation holds the remaining 5% stake in the mine.

Buenaventura, Newmont’s partner in the Yanacocha mine, is expecting to produce 17.5 million ounces of silver this year, down from an earlier forecast of 19.5 million ounces. The company held its 2009 gold outlook stable at nearly 1.3 million ounces, including its share of production from Yanacocha, one of the largest gold mines in South America. Buenaventura churned out 1.2 million ounces of gold, including Yanacocha and 17.5 million ounces of silver last year.
        

Company Description

Del Monte Foods distributes food and pet products in the United States and South America. It owns many well-known brands such as Del Monte, Contadina, Meow Mix, Kibbles 'n Bits, 9Lives and Milk-Bone.

The company is not affiliated with Fresh Del Monte, the fruit and vegetable provider.

On Sep 17, Del Monte announced that it was making a private placement offering of $450 million in aggregate principal amount of senior subordinated notes through its wholly owned subsidiary Del Monte Corporation. The notes will not be registered securities.

Sales Jump in Record First Quarter

On Sep 3, Del Monte reported fiscal first quarter 2010 results that blew by the Zacks Consensus Estimate by 900%.

Earnings per share were a record for the first quarter of 30 cents compared to the Zacks Consensus Estimate of 3 cents and easily surpassed EPS of a year ago which was a loss of 4 cents.

Sales jumped 12% to $813.7 million from $726.2 million in the second quarter of fiscal 2009. The major driver of the increase was pricing actions taken in 2009 to recoup some of the inflationary cost-driven margin contraction of prior years.

Volume gains, especially in the Pet Products segment, also contributed to the growth. Pet Products net sales jumped 20.3% to $412.3 million from $342.7 million in the year ago period.

Consumer Products net sales rose 4.7% to $401.4 million from $383.5 million in 2009. The company saw growth in several new items including Del Monte Fruit Chillers Tubes and Packaged Produce.

Fiscal 2010 Outlook Raised

Given the record first quarter, it's not surprising the company boosted full year guidance to the range of 88 to 92 cents up from the prior target of 76 to 80 cents. This is well above fiscal 2009's EPS of 74 cents.

Del Monte maintained its sales growth projection of between 4% and 6% compared to fiscal 2009.

Zacks Consensus Estimates Jump

Not surprisingly, the Zacks Consensus Estimates for the second quarter and the full year are on the move given the company's raised guidance.

The second quarter Zacks Consensus Estimate rose 3 cents to 20 cents in the last 30 days with 2 out of 9 analysts raising in just the last week.

The full year has actually moved 2 cents higher than the current guidance range, climbing 17.5% in the last 30 days to 94 cents from 80 cents. All 6 covering analysts raised estimates in that time period.

Del Monte was a Zacks Bull of the Day on Sep 17 and was raised to Outperform at Zacks.

Bull of the Day: Del Monte (DLM)

Value Fundamentals

Del Monte Foods is a Zacks #1 Rank (strong buy) stock. It has a price to book ratio of 1.35. The company's 5-year average return on equity (ROE) is a solid 11.22%.

Additionally, the company also pays a dividend which it just raised in July by 25%. A 5 cent quarterly dividend was paid in August, up from 4 cents prior. It currently yields 1.80%.

Zacks Investment Research

Chicago, IL – August 26, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Equity Residential (EQR), Apartment Investors (AIV), Fannie (FNM), Freddie (FRE) and ArvinMeritor Inc. (ARM).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

House Prices Actually RISING

Most of the adjustment in home prices is behind us, but I am not totally sure we are out of the woods. With the soft economy and rising unemployment, median incomes are not going up and are probably falling.

Major apartment REITs like Equity Residential (EQR) and Apartment Investors (AIV) have been reporting that they have had to lower stated rents recently and effective rents even more (i.e. throwing in a few free months of rent when you sign a lease). This means that rents are most likely going down nationwide, although it has not yet shown up in Owners Equivalent Rents, which is how the government tracks housing for calculating inflation. Declining rents and incomes will put more pressure on housing prices.

This will be particularly true once the artificial prop of the first-time home-buy tax credit expires. The other major prop to the market has been the Federal Reserve, which has turned into the mortgage buyer of first and last resort as it is in the process of buying $1.25 trillion in Fannie (FNM) and Freddie (FRE) backed securities. Eventually the Fed will have to reverse those actions (or inflation will spiral out of control), and when it does, the mortgage market is likely to get much, much tighter.

ArvinMeritor Loses Its Wheels

Earlier this month, auto parts supplier ArvinMeritor Inc. (ARM) agreed to sell its Wheels business to focus on its core business. Lochpe-Maxion, a Sao Paulo, Brazil-based producer of wheels and frames for commercial vehicles, railway freight cars and castings, will buy the segment from ArvinMeritor.

The sale is expected to close by the end of 2009. ArvinMeritor’s Wheels business has manufacturing facilities in Limeira, Brazil and San Luis Potosi, Mexico.

ArvinMeritor plans to invest up to $10 million in its commercial vehicle business in Brazil to support expansion into new product segments and new manufacturing technology. Despite the worldwide slump in automotive industry, the company's production in South America grew by 9% in the last quarter. Meanwhile, the company is also pursuing the sale of its light vehicle systems business, which includes the body systems unit.

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The sale is expected to close by the end of 2009. ArvinMeritor’s Wheels business has manufacturing facilities in Limeira, Brazil and San Luis Potosi, Mexico.

ArvinMeritor plans to invest up to $10 million in its commercial vehicle business in Brazil to support expansion into new product segments and new manufacturing technology. Despite the worldwide slump in automotive industry, the company's production in South America grew by 9% in the last quarter. Meanwhile, the company is also pursuing the sale of its light vehicle systems business, which includes the body systems unit.

ArvinMeritor has a leading position in most of its markets. The company is making drastic cost reductions through its “Performance Plus" initiative. It is also expanding geographically and outsourcing to low-cost countries.

However, difficult conditions in North American and West European automotive markets are primary concerns for the company. The downturn in the auto industry makes us apprehensive about the near-term prospects for auto suppliers. ArvinMeritor has withdrawn its fiscal 2009 financial outlook and suspended its quarterly dividend. High leverage and the risk of non-compliance of the debt covenants due to deteriorating profits are a matter of concern.

Company Description

Stepan Company manufactures specialty and intermediate chemicals used in consumer products and industrial application. The company produces surfactants, which are the key ingredients in consumer and industrial cleaning compounds.

The company explains that manufacturers of detergents, shampoos, lotions, toothpastes and cosmetics depend on surfactants to achieve the foaming and cleaning qualities of their products.

Stepan also makes lubricating ingredients and emulsifiers for spreading of agricultural products. The company produces germicidal quaternary compounds as well.

Stepan produces other specialty products, including custom-made flavors, emulsifiers and solubilizers, which are used in the food and pharmaceutical industries. The company's other products are used by the construction and refrigeration industries.

Stepan is headquartered in Northfield, Illinois and utilizes a network of modern production facilities located in North and South America, Europe and Asia.

A Record Quarter and Strong Momentum

The company recently turned in record results for the second quarter. Earnings per share of $2.09 surpassed the previous year's 93 cents and topped the Zacks Consensus Estimate by 130%.

Net sales fell 24% year-over-year on a drop in sales volume and lower prices, which contracted in response to falling commodity costs.

Stepan noted that its balance sheet strengthened as cash rose to $55.8 million on improved earnings and lower working capital requirements. Debt net of cash declined from $125.3 million to $65.7 million.

Stepan is a solid Growth and Income pick that has also seen strong momentum, climbing about 10% since reporting, which doubles the market's return over that time period.

Solid Income

The company also declared a quarterly dividend of 22 cents per share, which translates into an industry-leading yield of 1.85%.

The dividend is payable on September 15 to shareholders of record on August 31.

Bullish Forecasts

Analysts polled by Zacks are calling for 2009 earnings of $4.76 per share, an impressive 72% upward revision over the past month.

For 2010, the Zacks Consensus Estimate jumped 9% from $3.30 per share to $3.60 over the past month. Zacks Investment Research

The company reported a 7.4% increase in passenger traffic over July 2008 and a 20.3% upturn over the previous month. This growth was primarily driven by the increase in the supply of low-fare seats and the SMILES program (Latin America’s largest mileage program, with more than 6.2 million members).

The recent Operational Safety Audit registration from the International Air Transport Association will create a potential for its new code-share agreements with foreign airlines. This will provide GOL with a larger intercontinental feeder network, increasing the number of passengers with direct, convenient access to its extensive South American network.

Earlier this month, the company posted better-than-expected second-quarter results. Net income was R$353.7 million (US$192 million) compared to a loss of R$166.5 million in the year-ago period based on a 26% drop in operating costs. GOL’s net financial result of R$369.9 million was also helped by a 19% gain in Brazilian Real.

Higher Brazilian real will have a strong effect on domestic demand for international flights during the second half of 2009. A stronger real will make international travels more affordable. However, TAM S.A. (TAM) will gain much more than GOL as the latter has limited number of international flights which only fly within South America. TAM has a broad number of international flights, including those catering to the U.S. and Europe, which are in high demand among Brazilian travelers.

We believe that the business will remain unstable in the short term, but lower oil prices and falling rates in Brazil will help the company in the coming quarters.

Company Description

Bunge is an agribusiness and food company with operations in over 30 countries.

The company, founded in 1818 and headquartered in New York, manufactures fertilizers, originates oilseeds and grains, crushes oilseeds to make food for the livestock industry, produces bottled oils, mayonnaise, margarines and other food products, and mills wheat and corn for food processors, bakeries and other commercial customers.

Bunge has large operations in Brazil and Argentina as it operates 40 fertilizer facilities, including mines and blending plants, in the two countries.

Bunge Beat by 213.24% in the Second Quarter

On July 23, Bunge reported second-quarter results that surprised on the Zacks Consensus Estimate by $1.45 per share. Earnings per share were $2.13 compared to the Zacks Consensus Estimate of 68 cents.

Sales fell 23% to $10.994 billion from $14.365 billion in the year ago quarter. There was weakness across all segments compared to a year ago, with the largest segment, Agribusiness, declining 27% year over year. However, compared to the prior three quarters, the agribusiness segment saw improvement.

The Edible Oil Products segment also saw improvement due to better results in Europe and North America that more than offset lower volumes and margins in Brazil.

Bunge is expecting a solid second half of the year.

"Lower soybean production in South America has limited oilseed processing utilization in Argentina," said Alberto Weisser, Chairman and Chief Executive Officer.

"While challenging locally, this should continue to support crush margins on a global level. A large North American harvest, which according to early indicators is likely, should provide us with ample volumes for our agribusiness operations in that region."

The fertilizer segment remains challenging because of remaining high cost raw material inventory but the company is expecting good demand and improved phosphate pricing to boost the bottom line.

Reaffirmed 2009 Guidance

Because of the anticipation of a strong second half, the company maintained its prior guidance of $4.90 to $5.40 per share.

Mixed Movement for Zacks Consensus Estimates

Give the company's beat on the second quarter and its outlook for the remainder of the year, the 2009 Zacks Consensus Estimate jumped 15% to $5.15 from $4.48 in the last month with 3 out of 5 covering analysts raising.

Analysts aren't so bullish on the third quarter, however, as the Zacks Consensus Estimate fell 70 cents to $1.83 in the last 30 days.

Value Fundamentals

Bunge is a Zacks #1 Rank (strong buy) stock. It has a price-to-book of 1.05. The company has a solid 5-year return on equity of 13.01%. Additionally, the company pays a dividend with a current yield of 1.20%.

Zacks Investment Research

Revenues declined 11.6% to $1.1 billion, primarily due to lower gas pricing and coal sales. Coal revenues fell 9.9% to $822 million on lower demand from electric utilities as well as steel producers. Gas and other revenue amounted to $162 million (down 19.4%) and $86 million (down 12.2%), respectively.

Operating income rose 2.0% to $174.1 million and operating margin expanded to 16.3% from 14.1%. EBITDA grew 5.7% to $281.6 million and EBITDA margin improved to 26.3% from 22.0%.

Coal sales volume fell 23.4% to 13.4 million ton, including 0.1 million ton (0.5 million ton a year ago) sourced from third parties. Average realized price increased 16.2% to $56.4 per ton largely due to higher-priced contracts signed earlier in a stronger market. Operating margins improved 29.6% to $21.4 per ton because of higher realized price per ton.

Consol produced 14.4 million tons of coal in the quarter, down 13.3% from a year ago. The company further curbed production target by 2 million tons to 58 million tons for 2009 to match the reduced demand due to the ongoing economic slowdown. It is also negotiating with some of its customers to restructure shipments.

CNX Gas, in which Consol controls 83.3% stake, posted a net income of $33.0 million compared to $64.3 million, a year ago. It also upped its production guidance to 89 Bcf from 87 Bcf for 2009.

Consol expects production cut by coal producers to continue into next year, which should help in sustained recovery of coal prices as the global economy weathers the ongoing slump. It is cautiously optimistic about resurgence in metallurgical coal demand and pricing on improved outlook of the steel industry.

Capacity utilization in the U.S. has increased steadily in recent times. Of late, Consol has also been seeing growing interest from steel producers in South America and Europe.

Timely production cut and cost-control measures have enabled Consol to protect per-ton coal margin despite low demand. We remain upbeat on the long-term prospect of the company. Consol is well positioned to take advantage of the recovery in coal demand once the global economy starts reviving. We reiterate our Buy recommendation on the stock.

Given the strong backlog, expected stimulus funds, and huge potential for advanced metering technologies in domestic as well as international markets, we believe the company has strong revenue visibility for the next couple of years.

Further, Daimler Financial Services posted lower earnings due to the increased cost of risk. Earnings were also reduced by lower interest rates for discounted non-current provisions as well as currency-exchange rate movements. However, declining earnings was mitigated by the measures taken by the company to reduce costs and improve efficiency following the onset of the global economic crisis.

Consolidated revenue in the quarter shrank 25% to $27.9 billion (euro 19.6 billion). The company sold 391,500 cars and commercial vehicles worldwide, a 31% decline from a year earlier.

Mercedes-Benz Cars segment sold 287,243 vehicles, a decrease of 19%. Revenue in the segment fell 18% to $15 billion (euro 10.6 billion). However, the segment posted a significant 24% rise on a quarter-over-quarter basis, partially due to the full availability of the GLK compact sport-utility vehicle and the launch of the new E-Class model.

Daimler Trucks segment unit sales decreased by 56% to 54,134 vehicles. However, its market share increased almost everywhere. Sales fell 43% to $6 billion (euro 4.2 billion).

Mercedes-Benz Vans segment significantly increased its unit sales compared with the first quarter to 41,871 vehicles but was far behind the prior-year period (78,629 vehicles). Consequently, revenue in the segment tumbled 12% to $2 billion (euro 1.5 billion).

Daimler Buses segment sold 8,300 buses and chassis, a 25% fall from last year. This was due to lower demand for chassis in Latin America amid the recession. In addition to the ongoing contraction of markets in South America, Daimler encountered a sharp drop in demand in Mexico compared with the prior-year period, whereas unit sales in the U.S. increased. In Europe, the segment's city-bus business remained stable, while demand for coaches fell. This segment’s sales dropped 17% to $1.56 billion (euro 1.1 billion).

Daimler Financial Services contract volume remained almost flat at $85.8 billion (euro 60.3 billion) compared to last year. However, new business decreased by 16% in the segment to $9.2 billion (euro 6.5 billion).

For 2009, Daimler anticipates total unit sales to fall significantly from 2008 level of 2.1 million vehicles. Total revenue will accordingly drop from 2008 level of $136.4 billion (euro 95.9 billion). However, the company has undertaken measures to cut costs and avoid additional expenditure amounting to $5.7 billion (euro 4 billion). Besides reducing labor costs, these actions include lowering fixed costs and further streamlining organizational structure.

We continue to recommend DAI as Hold with a six-month target price of $40.50.

Quarterly revenue declined approximately 18% as lower shipments and unfavorable currency translation more than offset the positive impact of improved price mix. Glass shipments were down 12% compared to last year. Revenue declined 24% in European markets, 20% in Asia-Pacific, 15% in South America and 8% in North America.

Despite a significant drop in volumes, Owens is still maintaining its price-over-volume strategy. Management stated that the company is focusing on recovering cost inflation. Higher selling prices and improved product mix contributed 4% to sales, which more than offset the cost inflation in the quarter.

In addition, Owens is focused on improving operational efficiency and overall productivity to somewhat offset the rise in factor costs. Most of the progress has been seen in Europe, where the company has successfully consolidated its central functions and eliminated the duplication of processes.

Even in other geographic areas, Owens is shutting down underutilized/non-core facilities and relocating resources to ones that are more profitable. It is focusing on reducing fixed costs by shutting down less efficient furnaces and machine lines, closing high-cost factories and moving business to production lines and plants with surplus capacity.

Since the inception of its strategic footprint alignment initiative in 2007, Owens has shut down 15 furnaces in total, including one furnace in the second quarter. It announced two additional plant closures in Europe to be completed in the second half of 2009.

Owens has eliminated approximately $71 million of fixed costs year to date and $38 million in the reported quarter through these restructuring actions. The company aims to regain an improved margin through price as well as productivity gains.

Unit retail sales of lower horsepower tractors were down due to weakness in the landscaping, residential construction, and dairy sectors. This weakness is expected to continue for the remainder of the year.
 
In the EAME region, quarterly sales were down 28.0% due to lower volumes in Eastern and Central Europe, Russia, Scandinavia and Spain, partially offset by volume gains in Germany and France. The company experienced major demand weakness from the diary and livestock sectors.

For the remainder of the year, the company expects weak industry demand in Europe resulting from lower income across the entire farming sector. Demand weakness is expected to be severe in Eastern and Central Europe and Russia due to tighter credit markets.
 
Sales from the South American region were down 40.5% due to significant volume declines in Brazil and Argentina and a shift in sales mix towards lower horsepower tractors in Brazil. The company expects industry retail volumes to be significantly down in South America due to dry weather conditions and the impact of tightened credit on planted acreage and car production.
 
We concur with the company that the demand for farm equipment is not expected to recover in the next couple of quarters. As a result, AGCO lowered its full year revenue guidance marginally to $6.5–$6.8 billion from the previous guidance of $6.7–$7.0 billion.

In response to weak demand, the company is planning to cut its tractors and combines production by about 20 to 25% from the previous year’s levels. We expect the company to post full year sales at the low end of its guidance range.
 
Also, the company lowered the high end of its EPS guidance range. The company now forecasts EPS in the range of to $2.00–$2.25, compared to previous guidance of $2.00–$2.50.

ArvinMeritor will provide parts and components of power transmission and basic braking systems to Yutong for the production of Yutong buses and chassis. Under the agreement, in addition to continually providing high-end axle products to Yutong, ArvinMeritor will also offer differential carriers and brake calipers made in its production plant in Wuxi, China, for application in Yutong’s self-made axles.

The final product will be assembled at Yutong's plant in Zhenzhou, China. As part of this partnership, ArvinMeritor and Yutong will also sell and distribute standard aftermarket service kits for its products.

The project will commence at the end of 2009 and the investment is expected to exceed $50 million in the next five years. Meanwhile, both parties will also further strengthen the cooperation in a wider area.

ArvinMeritor expects the alliance to consolidate its position in the Asian markets and strengthen its existing partnership with Yutong. The company has been focusing on low cost countries across Asia and South America. It aims to achieve revenues of $1 billion in Asia in the next 5 years.

ArvinMeritor also plans to open new plants in leading cost-competitive countries, including India and Mexico. It plans to open a plant in Pune, India in the near term to support light vehicle customers. Recently, ArvinMeritor opened a new production facility in Monterrey, Mexico. The new plant will provide the infrastructure to support targeted growth areas in off-highway components and the CVS market. The new plant is expected to reduce costs and provide flexibility to meet higher demand anticipated in North America in 2009.

In South America, the company is growing by winning several significant business propositions in Venezuela.

We rate the shares a Hold with a six-month target price of $4.00.

Japan still retains its lead in engineering. A showroom at Panasonic's headquarters displayed a heated, multifunction toilet seat that conserves energy. (Wouldn't leaving the seat cold conserve even more?) The sleek Shinkansen bullet trains roll up to their appointed spots on time. TKX, an 87-year-old Osaka-based company that makes abrasives, has adapted its expertise to cutting silicon ingots into wafers for solar panels.

But social engineering is proving more challenging. Japan's population peaked in 2004 at about 127.8 million and is projected to fall to 89.9 million by 2055. The ratio of working-age to elderly Japanese fell from 8-to-1 in 1975 to 3.3-to-1 in 2005 and may shrivel to 1.3-to-1 in 2055. "In 2055, people will come to work when they have time off from long-term care," said Kiyoaki Fujiwara, director of economic policy at the Japan Business Federation.

Such a decline is cataclysmic for an indebted country that values infrastructure and personal service. (Who is going to maintain the trains, pay for social benefits, slice sushi at the Tsukiji fish market?) The obvious answers—encourage immigration and a higher birthrate—have proved difficult, even impossible, for this conservative society. In the United States, foreign-born workers make up 15 percent of the work force; in Japan, it's 1 percent. And, official protestations to the contrary, they're not particularly welcome. One columnist I met compared the standard Japanese attitude toward immigrants to that of French right-winger Jean-Marie Le Pen. In the 1990s, descendants of Japanese who had emigrated to South America early in the 20^th century returned to replace retiring factory workers. Now that unemployment is on the rise, Japan is offering to pay the airfare for those who wish to return home.

Japan doesn't particularly want to import new citizens, but it doesn't seem to want to manufacture them, either. It's become harder to support a family on a single income, and young people are living at home for longer. And Japan isn't particularly friendly to working mothers—pre-K day care is not widely available, and the phrase work-life balance doesn't seem to have a Japanese translation. (The directory of the Japanese Business Federation, a showcase of old guys in suits, makes the Republican Senate caucus look like a Benetton ad.) The upshot: a chronically low birthrate. Too often, demographic change was described to me as a zero-sum game—rather than being seen as potential job creators, women and immigrants are often seen as taking jobs from men.

As Gross goes on to argue, Japan seems awfully passive about this and while there is certainly merit in discussing whether the size of the Japanese population is moving in the right direction it is the composition which really matters here. You only need to move back one entry here at this space get some kind of indication of the outlook for Japan's population composition. There is really no need to get into the whole discussion about whether economic growth is a goal in itself or whether Japan shouldn't have the right to conduct the policies it wants. Evidently, it has. However, for all those who believe that aggressive population management is desirable either be it through deliberate policies (a la China) or by simply allowing the demographic transition to run its course (i.e. Germany, Japan etc) they should also provide an answer towards the question of what to do with the market economy defined, as it were, by a social contract between generations, some form of paygo pension system, as well as a wide batch of centrally provided goods.

Gross' analysis is not far from the view presented in a recent article by me and Edward published in the summer edition of JapanInc. In this article, we argue that Japan is dependent on exports and that this dependence is a function of its age structure.

We also emphasise that Japan, for all intent and purposes, may be stuck in so far as providing a strong response towards the challenge of ageing;

While it is certainly true that the Japanese economy is currently struggling, it is not entirely true that there is no line of defense. Japan still has both monetary policy and fiscal policy tools at its disposal. The problem is that having spent a decade and a half attempting to fight the twin problems of deficient internal demand and ongoing deflation, the force of these tools has been steadily ground down. Interest rate adjustments, after many years when Bank of Japan (BoJ) rates have been held near zero levels, have little additional push to offer, while less conventional tools (like simply printing even more money via quantitative easing) or strong fiscal stimulus face clear limits in a country where gross debt to GDP is forecast by the OECD to hit 193 percent in 2009. So what can Japan do? Well besides simply grinning and bearing it, the tragedy is that there is not a lot that can be done in the short term. Evidently the Japanese government should give what support it can through highly targeted spending programs. The Bank of Japan, meanwhile, should be moving ahead with an aggressive policy of quantitative easing to provide as much relief as possible to Japan’s struggling households and corporates. But the only real way forward here is to try to slow the rate of population aging, and that means a change in national discourse and priorities, giving more support to those Japanese women who want to have children and radically changing the mindset about the extent to which Japan needs to promote an active immigration policy.

However, if we can all agree that the situation is difficult, it is hardly an excuse for not moving forward on the issues which ultimately will need to be adressed. Japan will need to foster a more conductive policy for increasing fertility as well as a substantial changed is discourse is needed with respect to immigration.

Chicago, IL – July 14, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: America Movil (AMX), Apple Inc (AAPL), Telefonica (TEF), Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX).

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Here are highlights from Monday’s Analyst Blog:

America Movil Battles Movistar

America Movil (AMX), the leading provider of wireless services in Latin America, has announced its plan to launch the highly anticipated iPhone 3GS, an upgraded version of Apple Inc’s (AAPL) iPhone 3G, in six countries across central and south America by July 31, 2009. The company will initially commercialize the new device in Mexico, Columbia, Guatemala, El Salvador, Uruguay and the Dominican Republic, which will be followed by expansion to other markets under its coverage universe.

The latest iPhone model offers superior features and functionality compared to the iPhone 3G, including faster processor speed, improved battery life and a better camera.

Through its largest subsidiary Telcel, America Movil currently dominates the Mexican wireless market facilitated by its well-known brand, extensive distribution network, nationwide coverage and the country’s benign regulatory environment. The company’s share of the Mexican wireless market was nearly 71% in 2008, with 65% wireless penetration.

America Movil launched its 3G services in Mexico in February 2008 and became the first and only carrier to adopt these 3G offerings. Leveraging its 3G network, the company launched iPhone 3G in Mexico in July 2008, followed by subsequent roll-outs in 10 additional Latin American markets.

Although America Movil still commands a major share of the Mexican wireless market, it is gradually losing its position due to stiff competition from Telefonica’s (TEF) Movistar, which has recently completed commercial launch of its 3.5G wireless network across several Mexican cities -- representing a major network advancement.

Additionally, introduction of mobile number portability (subscribers can switch operators without losing their phone numbers) in July 2008 has increased subscriber churn (customers switching to competitors) as more are more customers are migrating to Movistar. Further, America Movil remains significantly challenged by the intensely competitive Brazilian wireless market.

The upcoming launch of the iPhone 3GS is expected to help America Movil to counter competition in a more effective manner. The high-profile handset will essentially boost customer adoptions of the company’s 3G services, thereby stimulating ARPU (average revenue per user) growth while reducing subscriber churn.

We reiterate our Hold rating for America Movil as investment risks across key markets, regulatory issues and weak inflationary/currency conditions may limit the company’s financial performance in the upcoming reporting periods.

Exxon Wins New Drilling Permit

On Friday, July 10, Exxon Mobil Corp. (XOM), the world’s largest publicly traded oil company, gained a permit from Norway’s top petroleum resources regulatory agency, the Norwegian Petroleum Directorate (NPD), to drill wellbore 25/8-17 in production license 027 D.

The Texas-based oil giant plans to drill wildcat wells (well drilled in an area where no current oil or gas production exists) on the license using semi-submersible facility Bredford Dolphin. Exxon Mobil has a 50% operated interest in the production license 027 D, which was awarded in December 2007. Well 25/8-17 is located just south of the company’s Jotun field project in North Sea and is the second well drilled on the production license.

One of the largest oil and gas producers on the Norwegian continental shelf, Exxon’s recent award demonstrates its global approach to the identification and pursuit of quality hydrocarbon resources and exploration opportunities.

We currently have a Buy recommendation on this large-cap integrated player. Exxon Mobil’s relatively low-risk energy conglomerate business structure, its fortress balance sheets, ample free cash flow even in a low price environment and growing dividends are well suited for uncertain times like these. Our other Buy-rated name in this space is Chevron Corp. (CVX).

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Earlier in January, Kinross had stated that it expects to produce approximately 2.4 to 2.5 million ounces of gold in 2009, up 32% year over year. Cost of sales per ounce is expected to be around $390 to $420 for the full year.

Capital expenditures for 2009 are expected to be approximately $475 million. The company anticipates exploration and business development expenses at $75.0 million for 2009. General and administrative expenses are expected to be about $110.0 million in the year.

We remain cautious about Kinross’ near-term performance due to rising cash costs and falling production at some of its existing operations. The increased costs due to poor ore grades are attributable to declining production levels across operations such as, Musselwhite, Porcupine and Round Mountain.

Moreover, the company’s debt level has gone up significantly due to recent acquisitions, including the Canada-based gold producer Bema Gold Corp. and Aurelian Resources in South America. Although these acquisitions are likely to help long-term growth, Kinross remains vulnerable to integration risk.

The slowdown in the global economy, especially in the emerging markets such as India, could also weaken demand for gold. India absorbs about 50% of global gold production.

Recently, Kinross said that workers at its La Coipa mine have initiated a strike following an unsuccessful collective agreement negotiation. One of Kinross’s subsidiaries in Chile, Compania Minera Mantos de Ore, owns and operates this mine. The company stated that the strike would affect about 300 ounces of daily gold produced at the mine. The company is continuing negotiations with the employees.

We reiterate our Hold recommendation on the shares of Kinross, with a six-month target price of $17.00.

Company Description

Stepan Company manufactures specialty and intermediate chemicals used in consumer products and industrial application. The company produces surfactants, which are the key ingredients in consumer and industrial cleaning compounds.

The company explains that manufacturers of detergents, shampoos, lotions, toothpastes and cosmetics depend on surfactants to achieve the foaming and cleaning qualities of their products.

Stepan also makes lubricating ingredients and emulsifiers for spreading of agricultural products. The company produces germicidal quaternary compounds as well.

Stepan produces other specialty products, including custom-made flavors, emulsifiers and solubilizers, which are used in the food and pharmaceutical industries. The company's other products are used by the construction and refrigeration industries.

Stepan is headquartered in Northfield, Illinois and utilizes a network of modern production facilities located in North and South America, Europe and Asia.

Strong Technicals and Fundamentals

Stepan is a solid Growth and Income pick that has also seen strong momentum lately. The stock has more than doubled the performance of the broader market over the past 3 months.

Analysts have been raising estimates during that time, upping full-year earnings estimates by 36.5% to $2.77 per share over the past 3 months.

For 2010, analysts have earnings pegged at $3.30 per share, versus the 3-months ago level of $2.71.

During the past 4 consecutive quarters, SCL's earnings have, on average, come in 18% ahead of analysts' expectations.

Stepan's return on equity (ROE) of 14% tops the industry average of 12%. The Growth and Income play also pays a dividend, yielding 2.1%. The averaging industry yield stands at a lower 0.7% .

The company saw a solid first quarter, delivering earnings per share of $1.13, surpassing last year's 85 cents and eclipsing the consensus estimate by 53%.

Second-quarter results are scheduled for release on July 28. Zacks Investment Research

Chicago, IL - April 29, 2009 - Zacks Equity Research picks Burger King (BKC) as Bull of the Day and Celanese Corp. (CE) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on AIG (AIG), Citigroup (C) and Bank of America (BAC).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

In the midst of a turnaround, Burger King's (BKC) customer traffic is beginning to decline, as diners move to food prepared at home and to competitors value meals, some of which are more extensive than Burger King's. Though these increasing economic headwinds heighten the risk in the company's turnaround, we think the plan is still viable and the shares valuation is compelling, albeit with substantial risk.

Now back in positive unit growth mode after four years of negative or no growth, BKC is poised, in our opinion, to grow earnings at a mid to high-teens CAGR over the next five years by accelerating unit growth, improving average unit volumes through restaurant remodels and new product launches and by expanding restaurant margins closer to those of McDonald's, the category leader.

Moreover, we think BKC shares offer investors an opportunity to participate in the fast-growing economies of Asia and South America, which are central to BKC's expansion plans but where it has a very small presence relative to MCD and Yum! Brands.

Bear of the Day

Celanese Corp. (CE) is a global hybrid chemical company based in Dallas. The company produces chemical substances and materials. The company concentrates in four different business segments targeting the consumer and industrial products market.

Weak market conditions drove a dramatic decline in overall global demand for many industries which affected Celanese operations. Recessionary trends, coupled with inventory destocking, resulted in sharp volume declines in the Advanced Engineered Materials and the Acetyl Intermediates businesses.

The company expects volumes to remain under pressure in 2009, even with the easing of inventory destocking. Thus, we rate the shares a Sell with a target of $10.00.

Recent Analysis from the Analyst Blog

Will the FDIC Be Super-Regulator?

In a speech to the Economic Club of New York yesterday, the Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair suggested that her agency was best suited to handle broad new powers being considered by the government to seize and restructure impaired, systemically important financial institutions before they threaten the broader system.

Government bailouts of companies like AIG (AIG), Citigroup (C), Bank of America (BAC) and others involving billions of taxpayer dollars have brought into focus the need to better handle the problem of "too big to fail" financial institutions. Regulatory reforms currently being considered include close supervisory oversight of risk-taking, risk management and the financial condition of such institutions.

Regarding the mechanism for resolution, Ms. Bair suggested the "good bank-bad bank model," where viable parts can be placed into the "good bank" using a structure similar to the FDIC's bridge bank, and the nonviable parts can be placed in a "bad bank" until they can be unwound or sold.

She stated that there is no need for another government agency to run the resolution program since the FDIC already has many years of experience resolving banks and closing them.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2677.

About Zacks 

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks InvestmentResearch is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:Mark VickeryWeb Content Editor312-265-9380Visit: www.zacks.com

Now back in positive unit growth mode after four years of negative or no growth, BKC is poised, in our opinion, to grow earnings at a mid to high-teens CAGR over the next five years by accelerating unit growth, improving average unit volumes through restaurant remodels and new product launches and by expanding restaurant margins closer to those of McDonald's, the category leader.

Moreover, we think BKC shares offer investors an opportunity to participate in the fast-growing economies of Asia and South America, which are central to BKC's expansion plans but where it has a very small presence relative to MCD and Yum! Brands. Zacks Investment Research

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Wednesday's Analyst Blog:

Morgan Stanley Reports a Loss

Morgan Stanley (MS) reported its 1Q09 results this morning. Net loss applicable to common shareholders was $578 million, or $0.57 per share, compared to a profit of $1.41 billion, or $1.26 a share in the first quarter of last year. The loss was much worse than the average estimate of a loss of $0.8 cents per share.

The company changed its fiscal year end from November 30 to December 31 (as a result of its becoming a bank holding company), and the results for December 2008 (a net loss applicable of $1.3 billion) were not included in the results. The results included $331 million, or $0.33 per diluted share, one-time tax related benefits.

Hudson City Beats by a Penny

After market close, Hudson City Bancorp (HCBK) reported 1Q09 earnings of $0.26 per share, a penny above our expectation and consensus. Results again experienced strong lending revenues, even though provisioning level increased and other credit quality metrics expanded.

Despite stability in the EPS trends, we remain concerned as to the relationship of provisions and non-performing assets, as well as the adverse trends with respect to credit quality metrics and regulatory capital ratios.

Millicom Reports Mixed Results

Millicom International Cellular (MICC), a leading wireless service provider in emerging markets, declared mixed financial results for the first quarter 2009. While revenue was significantly below our expectations, net income was above our forecasts mainly due to effective cost-control measures and favorable product mix.

We believe significant growth of fixed/mobile broadband services, pay TV services, and VAS/SMS businesses in Central America, South America, and Africa serve as fundamental business catalysts for the company.

GSK Helped by Foreign Currency

This morning GlaxoSmithKline, plc (GSK) announced financial results for the period ending March 31, 2009. Similar to the fourth quarter 2008, results were significantly positively impacted by the affects of foreign currency.

First quarter revenue of £6,769, increased by 19% from the first quarter 2009 and was significantly ahead of our estimate of £6,240 due to the greater-than-expected benefit from foreign exchange. Revenue in the quarter was positively impacted by 24% from currency translation and fell 5% on a constant currency basis.

Gilead Continues to Be Solid

Gilead Sciences, Inc. (GILD) reported financial results for the first quarter 2009 on April 21, 2009. Total revenues reported for the first quarter were $1,530.5 million, an increase of 10% over the first quarter in 2008 and dead-on with our $1,530 million forecast. HIV product sales totaled $1,268 million, up 32% year-over-year and were primarily comprised of sales of Viread at $160.6 million, Truvada at $590.4 million, and Atripla at $509.9 million.

Total product sales for the first quarter were $1,447.7 million, an increase of 36% from the first quarter 2008. Sales of Hepsera at $72.7 million, AmBisome at $64.3 million, and Letairis at $39.6 million also contributed meaningfully to revenues during the quarter. Royalties and other revenues totaled $82.9 million for the quarter, down 50% on lower sales of flu drug Tamiflu, but higher than expected due to the recognition of a sizable one-time collaborative deferred revenue.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com